DCIT, Circle-3(1), Hyderabad, Hyderabad V. Shantha Biotechnics Private Limited, Hyderabad, Hyderabad

ITA 1430/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6250 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 24-10-2016
• Court: TRIBUNAL
• Department Lawyers: K J RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1430/HYD/2016 ASSESSMENT YEAR: 2011-12 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD VS M/S. SHANTHA BIOTECHNICS LTD., HYDERABAD [PAN: AAECS6982Q] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI K.J. RAO, DR FOR ASSESSEE : NONE DATE OF HEARING : 12-01-2017 DATE OF PRONOUNCEMENT : 18-01-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-3, HYDERABAD, DATED 18-08-2016 IN WHICH LD.CIT(A) ADMITTING ADDITIONAL EVI DENCE HAS GRANTED BENEFIT TO ASSESSEE, WITHOUT GIVING AN OPPORTUNI TY TO THE ASSESSING OFFICER (AO). THE ONLY EFFECTIVE GROUND R AISED BY THE REVENUE IS GROUND NO. 2, WITH REFERENCE TO THE ABOVE ISSUE, STATING THAT LD.CIT(A) ERRED IN ALLOWING THE RELIEF WITHOUT FOLL OWING THE RULE 46A OF THE INCOME TAX RULES. ASSESSEE WAS NOT REPRESE NTED BY ANYBODY AND CONSIDERING THE SUBMISSIONS OF THE LD.DR, THE CASE IS HEARD EXPARTE-ASSESSEE. I.T.A. NO. 1430/HYD/2016 M/S. SHANTHA BIOTECHNICS LTD., :- 2 -: 2. BRIEFLY STATED, ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF PHARMA PRODUCTS BASED ON BI OTECHNOLOGY. IT FILED RETURN ADMITTING LOSS OF RS. 1,15,14,09,762/-. ASSESSEE CLAIMED WEIGHTED DEDUCTION @ 200% U/S. 35(2AB) OF THE INCOME TAX ACT [ACT]. IN THE ABSENCE OF FORM NO. 3CL, ASSESS EES CLAIM WAS RESTRICTED TO 100% AND THE DIFFERENCE OF RS. 17,7 4,99,703/- WAS DISALLOWED. 3. IN THE PROCEEDINGS BEFORE THE LD. CIT(A), ASSESSEE SUBMITTED FORM NO. 3CL DT. 31-05-2014, WHEREIN THE EXPENSES INC URRED WERE CERTIFIED TO AN EXTENT OF RS. 1761.82 LAKHS. LD.CIT(A ) WHILE NOTING THAT OBVIOUSLY FORM NO. 3CL WAS NOT AVAILABLE TO THE AO, WHO COMPLETED THE ASSESSMENT ON 18-03-2014, HOWEVER, TOOK INTO CONSIDERATION THE SAID FORM FILED AND DIRECTED THE AO TO GRANT THE DEDUCTION. LD.CIT(A) RELIED ON THE ORDER FOR AY. 200 6-07 AND 2008-09 IN WHICH ON THE SAME ISSUE THE APPEALS WERE A LLOWED. HOWEVER, LD.CIT(A) NOTICED THAT THERE WERE MINOR VARIA TIONS IN THE FIGURES MENTIONED IN THE ASSESSMENT ORDER AND THE FIGU RES MENTIONED IN FORM NO. 3CL, THEREFORE, AO WAS DIRECTE D TO VERIFY THE ARITHMETICAL ACCURACY AND ALLOW THE DEDUCTION U/S. 35(2AB). 4. THE ONLY ISSUE RAISED BY THE REVENUE AS STATED EAR LIER WAS WITH REFERENCE TO NOT GIVING AN OPPORTUNITY TO THE AO WHILE ADMITTING FRESH EVIDENCE. LD.CIT(A) NOTICES THAT FORM N O. 3CL WAS NOT AVAILABLE BEFPRE THE AO AT THE TIME OF COMPLETION OF ASSESSMENT. WHEN THE SAME WAS FILED BEFORE THE LD.CIT (A), RULE 46A REQUIRES AN OPPORTUNITY TO BE GIVEN TO THE AO FOR VERIFICATION. CONSIDERING THAT THE FORM NO. 3CL HAS BEEN OBTAINED B Y ASSESSEE AFTER THE ASSESSMENT WAS COMPLETED, WE MODIFY THE ORDE R OF THE I.T.A. NO. 1430/HYD/2016 M/S. SHANTHA BIOTECHNICS LTD., :- 3 -: CIT(A) AND DIRECT THE ASSESSEE TO FURNISH THE SAME BEF ORE THE AO, WHO SHOULD VERIFY AND ALLOW THE DEDUCTION AS CLAIMED . AO IS ALSO DIRECTED TO VERIFY THE AMOUNTS STATED IN THE FORM NO. 3 CL VIS-A-VIS CLAIM MADE BY ASSESSEE AND ALLOW THEM AFTER DUE VERI FICATION IN THE LIGHT OF THE PROVISIONS OF THE ACT. WITH THESE DIRECTIO NS, GROUND OF THE REVENUE IS CONSIDERED ALLOWED FOR STATISTICAL PURP OSES. 5. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JANUARY, 2017 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 18 TH JANUARY, 2017 TNMM COPY TO : 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3( 1 ), HYDERABAD. 2. M/S. SHANTHA BIOTECHNICS LTD., 5-10-173, 3 RD FLOOR, VASANTHA CHAMBERS, FATEH MAIDAN ROAD, BASHEERBAGH, HYDERABAD. 3. CIT (APPEALS)-3, HYDERABAD. 4. PR.CIT-3, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.